Before diving head-first into buying crypto in Australia, there are a few things a beginner might want to know. Here are quick answers to quick questions. Once you know the rules and regulations, you can buy crypto in Australia and confidently begin your crypto journey.
Is It Legal?
Yes! Australia is one of many countries that recognises and permit cryptocurrencies. Buying or selling cryptocurrencies is legal in Australia, although perhaps not all cryptocurrencies are recognised.
Can One Use Bitcoin to Buy Stuff?
Yes, but not everywhere. While more and more retailers are beginning to accept crypto, some are still hesitant. For many purchases, you will be able to use cryptocurrency. Still, the days for it to become the primary mode of transaction are yet to come.
Is Bitcoin Taxed?
Yes, and it can be slightly complicated. The Australian Taxation Office considers cryptocurrency an asset rather than money or foreign currency. Cryptocurrency is actually taxed depending on the purpose for which it is acquired or held. Whether it is trading, isolated transactions, investments, or a result of staking or the holder being an issuer of cryptocurrencies, the tax implications are different.
Can One Use Bitcoin to Pay Tax?
Although buying with crypto means you still have to pay GST, you cannot use cryptocurrencies to pay your taxes.
Too complicated? Maybe you don’t understand how crypto works but still want to get involved. Did you know you could invest indirectly? Buy crypto in Australia from companies that invest in crypto. That way, as their earnings go up, so will yours! It’s a much safer bet, and you let the experts at the company do the planning, strategising, and thinking.
How to Buy Crypto in Australia
Picking the Ideal Crypto Broker
Different brokers have different setups and might charge different rates. With different deals, your profits or losses could vary significantly. “Free” brokers might not charge you an amount up front but make their earnings by selling your data to third parties. The platform you use for your activities might also be where you decide to hold your wealth. Finding a trusted and dependable broker is thus definitely worth the fees they might charge.
Account Setup and Depositing Your Investment
Like any platform that deals with currencies or trading, verification is an essential process before you start. Unless you’ve set up a dummy account to practice your trading skills before you begin, keeping your important documents handy while setting up your account is a good idea. You’ll need your passport, government ID, and maybe your driver’s license. Keep your pearly whites ready because you might also have to take a selfie!
Since cryptocurrency is not currently regulated in Australia, you could be subject to fraud or theft. Until the authorities can put down stricter laws, it is up to the investor to protect his earnings smartly. You can store it in two wallet types: hot or cold. Hot wallets are linked to the internet via your devices, but not cold wallets. This makes them a much safer alternative, but there’s a catch! You must remember the keycodes to the cold wallets, or you might lose your cryptocurrency forever! Hot wallets, on the other hand, sound less safe, but should you forget your key, there might be custodians to help you out.
Once you’re done with all that, remember to brush up on trading strategies like portfolio diversification and staking rewards!